Weekly Investment News -
Aurum Advisory Services

Weekly investment news from Aurum Wealth Management Group.

Taper Talk to Interest Rate Hike Hearsay

Aurum Weekly Access - 12/19/13
By Michael McKeown, CFA, CPA - Director of Research
 

If your ear drums have not blown out from the overuse of the word 'taper' in financial media, then you will be happy to know the Fed announced it will be slowing its asset purchases by $10 billion next month.  We mentioned this back in May in our piece "Closer to the Q-End?", highlighting the Fed's putting markets on notice and before interest rates spiked.   Lately many folks guessed whether taper will come this month, in three months, or six months, we began to think about when and how an interest rate hiking cycle could come about.

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Looking in the Bond Direction

Aurum Weekly Access - 12/12/13
By Michael McKeown, CFA, CPA - Director of Research

For the dear readers of our (semi) weekly missive will know that our penchant for bonds fleeted over the last few years.  We do not have anything against fixed income securities per se, it is just that the value for today's price is less than historical averages.  In our view, there is no such thing as a bad asset, just a bad price to acquire that asset.

 

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Watching Home Prices with Zillow

Aurum Weekly Access - 11/22/13
By Michael McKeown, CFA, CPA - Director of Research
 

Every week plenty of data on national real estate is released.  Watched by analysts closely are the mortgage applications and monthly changes of the Case-Shiller Home Price index.  'On fire' is the only way to describe the housing data over the past 18 months, registering double digit price gains across regions.

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Chart Check-up

Aurum Weekly Access - 11/8/13
By Michael McKeown, CFA, CPA - Director of Research
 

A picture is worth... you know how it goes.  But we will just add a few bits of our observances on the graphical displays of data.

 

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Less Taper Talk, Not Much Action

Aurum Weekly Access - 9/20/13
By Michael McKeown, CFA, CPA - Director of Research
 

After every research shop on Wall Street put out estimates of whether a little bit of taper or a lot of taper would be announced at this week's Fed meeting, it was all for naught.  Ben Bernanke & co. surprised everyone by announcing that the LSAP (Large Scale Asset Purchases) would continue as scheduled at $85 billion per month.

 

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Mom & Pop, "Welcome to the Club"

Aurum Weekly Access - 9/5/13
By Michael McKeown, CFA, CPA - Director of Research
 

Large private equity firms are bringing new products to the masses.

In early August Barron's published "The Next Private-Equity Investors: Mom and Pop" and the Wall Street Journal covered the topic in May with Megafirms Talk about Challenges Catering to Retail Investors.

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The Role of Cash - Part 2

Aurum Weekly Access - 8/14/13
By Michael McKeown, CFA, CPA - Director of Research
 
Cash deserves an allocation within portfolios.  Last week we covered why for liquidity management reasons, but its importance  extends to  opportunity  risk management.
 

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The Role of Cash - Part 1

Aurum Weekly Access - 8/7/13
By Michael McKeown, CFA, CPA - Director of Research
 

We believe that cash is an important asset class within portfolios. The proper cash allocation is driven by two main factors: (1) liquidity management and (2) opportunity risk management.
 

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Getting Real

Aurum Weekly Access - 6/28/13

By Michael McKeown, CFA, CPA - Director of Research

 

 
June was a volatile month and a key reason was real interest rates finally going positive as shown by the 10-year TIP below.  It spent the last 18 months below 0% until June 7th.
 

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How to Maximize After-Tax Returns

Aurum Weekly Access - 6/07/13
By Michael McKeown, CFA, CPA - Director of Research

 

 

The goal of any personal investment program should be to maximize real (inflation-adjusted) returns on an after-tax basis, comparable to the necessary and requisite risk to achieve the objectives.  Even though tax season is over (as our friends at Skoda Minotti are quite happy about), tax planning for investments is never over.  One easy way to improve tax efficiency is with low turnover managers that generate long-term capital gains as opposed to short-term gains taxable at ordinary income rates.  Another is using municipal bonds, assuming the asset class is fairly priced on an absolute basis and relative to other fixed income alternatives of similar risk.  A third way to increase portfolio tax efficiency is asset location. 
 

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Closer to the Q-End?

Aurum Weekly Access - 5/17/13
By Michael McKeown, CFA, CPA - Director of Research
 
 

The end of Quantitative Easing (QE) is coming one day; the Fed put everyone on notice with four Fed officials discussing the 'taper' of open market security purchases.(i)   Many people believe the money printing from the Fed went directly into the stock market and that these dollars are what is propelling the equity markets to new all-time highs.  While they are somewhat right in form, they are wrong in substance.  The Fed is not buying equities, but it is shrinking the supply of Treasuries and replacing them with cash.  Repressing the interest rate curve is what the Fed is intentionally doing, and in so forcing the marginal investor higher than he or she would normally have to venture along the risk curve to earn satisfactory returns.


 

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Talkin' a Little R&R

Aurum Weekly Access - 5/7/13
By Michael McKeown, CFA, CPA - Director of Research
 
 

If you have not followed the exciting world of global macroeconomics over the last month, you missed a major controversy.  The widely publicized authors Carmen Reinhart and Ken Rogoff (R&R), professors at Harvard University, came under scrutiny for work related to a paper and the conclusions on their book, This Time is Different.  The key takeaway from the book and subsequent papers was that once a country reaches a public debt to GDP threshold of 90%, growth slows dramatically.  This had enormous influence on policy makers all over the world given that the majority of developed countries, from the U.S., to Japan, to most countries of the Eurozone had debt to GDP ratios well above 90%.  The policy is familiar to most in that the government sector must cut deficits for the private sector and the overall economy to prosper.  None of this was the controversial... until now.


 

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Baseball's Long Season

Aurum Weekly Access - 4/5/13
By Michael McKeown, CFA, CPA - Director of Research
 
 

America’s pastime is finally back with buzz from anticipation of the season beginning turning to excitement.  There was already nearly a ‘perfect game’ and our Cleveland Indians started with a hot two game winning streak (it doesn’t take much for we Cleveland fans).  With 162 games on the calendar over the next six months though, the old baseball saying applies, “don’t let the highs get you too high, or the lows get you too low.” 


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What's going on in Cyprus?

Aurum Weekly Access - 3/22/13
By Michael McKeown, CFA, CPA - Director of Research
 
European banking concerns again flared up over the past week, this time in a small island country, Cyprus.  The concerns are another example of the structural issues with the European Central Bank and its policies.
 

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The Complex - Gold, Commodity Update

Aurum Weekly Access - 3/6/13

 By Michael McKeown, CFA, CPA - Director of Research

"Not all treasure is silver and gold, mate." – Jack Sparrow, Pirates of the Caribbean (2003) [i]

Since January 2009, which had a higher return, gold or stocks?

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Golfing & Failure Points

Aurum Weekly Access - 2/21/13

By Michael McKeown, CFA, CPA - Director of Research

When going about learning how to complete a task, people typically learn the principles and rules necessary to complete the objective.  Golf is a classic case.  Examples include: "keep your head down,"  "straighten your left arm," and "swing through the ball." As anyone who shanked a tee shot into the woods knows, implementing this checklist of swing movements in practice is not an easy way to improve golf scores.

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Go With The Flow?

Aurum Weekly Access - 2/8/13

The calendar year of 2013 is off to a nice start for equity investors.  There is historical tendency of a positive return for January highly increasing the odds for a positive rest of the year.  The hit rate is impressive at 78%, but it is no guarantee.

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Debt Ceiling Debacle, Part Deux

Aurum Weekly Access - 1/17/13

By Michael McKeown, CFA, CPA - Director of Research

Since 1944, America's debt ceiling was increased 94 times!  Usually just a formality in Congress now seems like awful theatre.

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Trimming Your Core

Aurum Weekly Access - 12/20/12

Tis the season to gather with friends and family and indulge on delicious meals, deserts, and even beverages, perhaps.  Soon after the holidays pass though, resolutions on losing the extra pounds from the festivities this time of year will be here, usually focusing on that stubborn mid-section area to slim down the core.

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China: Not Really Year of The Dragon

Aurum Weekly Access - 12/07/12

Depictions of dragons in China go back to 16th century BC and it was the mythical animal associated at times with the emperor and his power.  Chinese dragons symbolize control over elements such as rainfall, are considered wise, and are symbols of power, strength, and good luck.  Said to represent the characteristics of the people born that year, the dragon certainly did not represent strength for the economy or equity market in 2012.

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Latest News

Aurum Adds New Client Manager, Laura Springer. Read more.

Aurum Welcomes New Partner, Wendy Eldridge. Read more.

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